Question

As a result of an increase in interest rates, the equilibrium interest rate___________(does not change, Rises,...

As a result of an increase in interest rates, the equilibrium interest rate___________(does not change, Rises, or falls) and the equilibrium quantity of money___________ ( Decreases, Increases, or does not change)

Which of the following factors may also be responsible for a shift in the money demand curve? Check all that apply.

The level of foreign direct investment

The discount rate

The rate of inflation

Foreign demand for a country’s goods

Suppose that the demand for money is unstable and the Federal Reserve chooses to control the money supply. Which of the following would be a side effect of such a policy?

Great fluctuations in interest rates

Insignificant changes in the money supply

Insignificant changes in interest rates

Great changes in the money supply

.

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